DBS Group Holdings Ltd., Southeast Asia’s largest bank, will increase investment and hiring in China’s Greater Bay Area as it expects growth in the region to outpace the rest of the country, according to the lender’s head of North Asia.
“There’s no reason not to be optimistic about the future and the long-term prospects of China,” Sebastian Paredes, who is also the chief executive officer of DBS Bank in Hong Kong, said on Bloomberg TV Wednesday.
Paredes said he viewed the China operations holistically and it would have a positive effect on the rest of DBS’ businesses around Asia. Business from Chinese clients at the bank’s Hong Kong and Singapore operations have seen double digit growth in the last few years, he said.
The Singapore-based bank has been keen to expand in Greater China. Earlier this year it signaled its interest to raise its 13% holdings in Shenzhen Rural Commercial Bank in China. The bank will also complete its acquisition of Citigroup Inc.’s consumer banking business in Taiwan this month.
The diversification comes as the lender seeks more growth in places outside its home market. Hong Kong is DBS’s second-largest revenue generator after Singapore, and contributed to about 16% of its total income in the first half.
Despite recent headwinds in China’s economy, Paredes said the expected 5% and 4.5% growth in China’s economy this year and next provides almost $1 trillion of incremental growth. He pointed to electric vehicles and batteries, and semiconductors as opportunities in the country.
DBS recently reported second-quarter profit that topped estimates as net income soared 48% to S$2.7 billion ($2 billion), fueled by higher lending margins while fees also expanded.
--With assistance from Adrian Wong, Shery Ahn and Haidi Lun.
